RRI Live!

Listen to Radio Romania International Live

Romania is out of recession

The European Commission has announced that Romania has come out of recession in the third quarter of the year.

Romania is out of recession
Romania is out of recession

, 05.11.2014, 14:14

Romania is out of recession, with a 1% growth of the GDP in the third quarter of the year compared to the previous quarter, after dropping for two quarters in a row, reads the European Commission’s autumn forecast made public on Tuesday. According to this forecast, Romania will register a 2% economic growth in 2014, lower than the previous 2.5% estimate.



Private consumption and exports were the main growth engines in the third quarter, but investments continued to drop. Brussels’ report also shows that in the first half of 2014, Romania registered a 12.8% growth in exports, exceeding expectations, while imports went up by 10.6%. On the other hand, in the second half of the year, the Commission expects this development to slow down and to even take a downward trend in the 2015-2016 period.



At the same time, because of the domestic demand, the increase in imports will exceed that of exports, the European Commission has warned, which has also revised the economic growth forecast for 2015, down from 2.6% to 2.4%. The European Commission also estimates that Romania’s budget deficit will drop to 2.1% of the GDP this year, but in 2015 the fiscal consolidation process will reverse, with a deficit rate growing to 2.8%, unless the Government takes the necessary fiscal policy measures.



The Commission believes the Executive will have to increase taxes or reduce expenditure in order to make up for the drop in revenues forecast for 2015, a drop triggered by the reduction of social security contributions, the tax on special construction works and excises. The European Commission has warned that by the time the winter forecast was drawn up, the authorities in Bucharest failed to supply the Commission with a draft budget for 2015.



The Commission recalls that the budget deficit target agreed by Romania with the International Monetary Fund and the European Commission for next year is 1.4% of the GDP. In response, the Governor of the National Bank of Romania, Mugur Isarescu, has stated that, given the budget surplus registered in Romania in the first 10 months of the year, it is possible that next year no tax increase or reduction in spending will be necessary. He has also said that a decrease in public investment could be a benefit in the long run, provided this happens by reinforcing financial discipline, eliminating unrealistic projects and corruption, even if this may affect economic growth in the short run.



On the other hand, the Central Bank has again reduced the monetary policy interest rate by 0.25%, down to 2.75% per year. The Central Bank has also decided to reduce the rates on minimum statutory reserves for liabilities in foreign currencies from 16 to 14%. The Central Bank has also maintained to 10% the statutory reserves for liabilities in the national currency.

The Ciolacu was sworn in / Photo: presidency.ro
Today in the News Tuesday, 24 December 2024

Romania has a new Government

The new Government in Bucharest was voted in by the Parliament.   The new Government of Romania, led by the Social Democrat Marcel Ciolacu, took...

Romania has a new Government
Timişoara, 35 years ago (Photo: Costantin Duma)
Today in the News Monday, 23 December 2024

35 years since the anti-Communist Revolution in Romania

35 years have passed since Timişoara became the first city free from communism in Romania, a moment that triggered a wave of protests which would...

35 years since the anti-Communist Revolution in Romania
Foto: PIX1861 / pixabay.com
Today in the News Friday, 20 December 2024

Economic effects of political instability

The deadlock related to the establishment of a parliamentary majority to propose a prime minister and, therefore, the impossibility of forming a new...

Economic effects of political instability
foto: presidency.ro
Today in the News Friday, 20 December 2024

Conclusions of the Winter European Summit

The EU heads of state and government gathered in Brussels to discuss the war in Ukraine, migration, the situation in the Middle East, the Republic of...

Conclusions of the Winter European Summit
Today in the News Thursday, 19 December 2024

The EU and the exposure to disinformation

Attending the EU-Western Balkans summit and the European Council in Brussels, the Romanian president Klaus Iohannis said Romania was confronted with...

The EU and the exposure to disinformation
Today in the News Thursday, 19 December 2024

Fitch revises Romania’s outlook to negative

Fitch Ratings has revised Romania’s outlook to negative, citing political instability and budget deficit.     Fitch Ratings has...

Fitch revises Romania’s outlook to negative
Today in the News Wednesday, 18 December 2024

A new Forestry Code

The new Forestry Code, a milestone in the National Recovery and Resilience Plan, was adopted by the Chamber of Deputies in Bucharest as the...

A new Forestry Code
Today in the News Wednesday, 18 December 2024

EU investigates TikTok

The European Commission opened formal proceedings against the TikTok social media platform for alleged violations of the Digital Services Act in the...

EU investigates TikTok

Partners

Muzeul Național al Țăranului Român Muzeul Național al Țăranului Român
Liga Studentilor Romani din Strainatate - LSRS Liga Studentilor Romani din Strainatate - LSRS
Modernism | The Leading Romanian Art Magazine Online Modernism | The Leading Romanian Art Magazine Online
Institului European din România Institului European din România
Institutul Francez din România – Bucureşti Institutul Francez din România – Bucureşti
Muzeul Național de Artă al României Muzeul Național de Artă al României
Le petit Journal Le petit Journal
Radio Prague International Radio Prague International
Muzeul Național de Istorie a României Muzeul Național de Istorie a României
ARCUB ARCUB
Radio Canada International Radio Canada International
Muzeul Național al Satului „Dimitrie Gusti” Muzeul Național al Satului „Dimitrie Gusti”
SWI swissinfo.ch SWI swissinfo.ch
UBB Radio ONLINE UBB Radio ONLINE
Strona główna - English Section - polskieradio.pl Strona główna - English Section - polskieradio.pl
creart - Centrul de Creație Artă și Tradiție al Municipiului Bucuresti creart - Centrul de Creație Artă și Tradiție al Municipiului Bucuresti
italradio italradio
Institutul Confucius Institutul Confucius
BUCPRESS - știri din Cernăuți BUCPRESS - știri din Cernăuți

Affiliates

Euranet Plus Euranet Plus
AIB | the trade association for international broadcasters AIB | the trade association for international broadcasters
Digital Radio Mondiale Digital Radio Mondiale
News and current affairs from Germany and around the world News and current affairs from Germany and around the world
Comunità radiotelevisiva italofona Comunità radiotelevisiva italofona

Providers

RADIOCOM RADIOCOM
Zeno Media - The Everything Audio Company Zeno Media - The Everything Audio Company